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Like preceding months, October rail volumes were up and down when compared to the last two years, according to data released by the Association of American Railroads (AAR).

The AAR reported that monthly rail carloads for October—at 1,196, 432—were up 8.7 percent from October 2009 and down 7.9 percent from October 2008. And the weekly October average of 299,108 carloads was the highest since October 2008, topping September’s 297, 502 weekly carload average.

October saw more sustained growth on the intermodal side at 941,775 trailers and containers for a 14 percent gain compared to October 2009 and a 1.2 percent increase compared to October 2008. The weekly average of 235,444 trailers and containers was the highest since October 2007 and the 12th highest weekly monthly average on record for intermodal, according to the AAR. Even with strong weekly numbers, October intermodal volume was 0.9 percent less than September on a seasonally-adjusted basis.

The AAR has noted in the past that domestic intermodal traffic in particular continues to see strong growth due to conversions of over-the-road domestic traffic to rail and growth in international trade. The AAR also said it reflects a years-long trend of domestic freight converting from truck trailers to containers on rail; truck trailers can be double-stacked, which makes them more cost-efficient and effective.

As LM has reported, while railroad activity is clearly picking up compared to a dismal 2009, it is still lagging 2008 and earlier years on an absolute volume basis. And based on various economic indicators it is clear it will be a while more until rail volumes return to the same levels as previous years.

“Last week the government announced that GDP grew roughly two percent in the third quarter of 2010,” said AAR Senior Vice President John T. Gray in a statement. “Rail traffic in October suggests that similarly moderate growth is continuing into the fourth quarter. Just like our nation’s economy still has further to go to full recovery, so does rail traffic. Still, traffic is much better than it was a year ago, especially on the intermodal side, and railroads look forward to continuing to move the economy forward.”

Anthony B. Hatch, principal of New York-based ABH Consulting, said in an interview that while many headlines point to the slowing down of a spring rush to recovery, rail traffic has managed to remain still strong well into the fall and is stronger than the macroeconomic, business, and general news headlines would suggest.

“Things are much than at the beginning of the year or even the beginning of the summer and may be starting to slow down a little bit on a year-over-year basis, and when you combine intermodal and carloads they are up about ten percent, which is pretty good compared to what we had earlier,” said Hatch. “We are now facing tougher comparisons and are starting to lap the beginning of the recovery, rather than the April and May trough. Now that the economy is starting to recover, we are seeing a year-over-year comparison of recovery over recovery, and we are still short of 2008 except for intermodal and are still well-short of 2006, which was the real peak of the last cycle.”

Current rail traffic, said Hatch, represents a “pretty good” recovery, with some clear trend lines pointing towards the last peak, with a strong 2011 possibly putting the recovery one or even two years ahead of where the recovery may have occurred when the situation was more dire. The recovery is less than complete but faster than the originally anticipated pace.”

Of the 18 major commodities tracked by the AAR, 15 were up on an annual basis. Metallic ores and metals were up 190.0 percent, primary metal products were up 21 percent, crushed stone, gravel, and sand were up 25.5 percent, and stone, clay, and glass products were up 23.1 percent.

Railroad employee numbers rose by 1,169 to 154,094 employees in September (the most recent month for which data is available) from 152,925 in August. And the AAR said 12,799 rail cars were brought back into service in October, with 318,275 cars—or about 20.8 percent—of the North American railcar fleet currently remaining in storage.

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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